When Health Insurance Hurts

Recently I read about the struggles and frustrations of an emergency physician who found himself in an situation becoming more common. After the emergency department treatment was complete and admission was recommended, his patients were undergoing insurance checks and then being asked to request a voluntary transfer to another hospital that was in-network. Since the services were available at the hospital, these were not transfers for a higher level of care, and were instead made “at patient request”. The emergency physician was frustrated and concerned with several issues: the time it was taking to explain to the patient what an out of network transfer meant and the negative backlash from the patient, the time it was taking to document these conversations, the time it was taking to contact a receiving facility and arrange the transfer, and the risks involved to the patient and his practice.

This prompted the following conversation:

Why do hospitals check insurance status?

The current insurance climate allows insurers to negotiate “networks” that include hospitals. These in-network hospitals agree to lower pricing in return for preferred status, bringing them more patients. The problem is more severe where there are numerous options, or market saturation. If you are the only hospital within 100 miles, you don’t need to negotiate to draw patients. Insurers have no choice. However, where there are more hospitals, insurers have more options, resulting in smaller, more restrictive networks, and more transfers for insurance purposes.

Does the patient have a choice?

Yes, somewhat. The patient always has the choice to decline a transfer based solely on insurance network status, or in this case to decline to “ask” for the transfer. However, declining would result in an out-of-network bill and a significantly higher balance due from the patient. Reality shows that most patients do not have significant funds sitting around for this type of decision, and it isn’t really a choice at all.

Is this a good thing for the patient?

It is hard to make any case that would show a benefit to the patient in this scenario. One might try to claim an overall benefit to the greater good by saving insurance companies money in order for them to improve access for greater numbers of people. However, that kind of savings realocation is rarely, if ever, the case. Ideally, no transfer would be required and the patient would stay where they are, eliminating the risks. Those include transportation risks and definitive treatment delays. But if it means a $10,000 bill vs a $500 copay, it isn’t really a choice. It also places the responsibility of poor outcomes on the patient since it was “their request” that promoted the transfer.

Is it really a higher burden for the physician ?

Yes. Multiple things must be documented:

The service is available but the patient is declining on financial grounds, out of the physician’s control.

The patient understands the risks of transfer (transport)

The receiving facility understands the transfer is for patient preference and not an EMTALA related higher level of service.

The patient is medically stable enough to be transferred (a formal definition of which does not exist).

All of this increases medicolegal risk for the physician. Also, more time on the phone means less time with the next patient waiting.

Is it better for the hospital ?

No. Transfers take up more emergency department bed time, reducing bed turnover, and impeding flow. Transfers also require providers to spend more time on administrative tasks, reducing efficiency and taking them away from waiting emergency department patients. Additionally, transfers mean lost revenue for a hospital. Treatment that could have been rendered at the initial hospital is being provided elsewhere.

Is it unsafe?

It is certainly more risky, and much of it depends on the environment. Chances are good that the area where this is occurring is densely populated, thus allowing for the requisite multiple hospitals to exist in proximity. Increased population density comes with traffic congestion and increased transportation risks (ground or air). Additionally, hand offs (the transition of one healthcare provider to another for any given patient) are known to increase the risk of medical errors. Hand offs between facilities even more so as patients must travel with printed records from differing EMR systems that are very difficult to read, and images on discs with different software requirements. Also, information conveyed by phone may not be completely documented in the record. This is compounded by the fact that the receiving provider may not even be the one that took the initial phone call so anything passed along verbally may not be communicated if it does not make it into the record. And finally, time spent in the process of transfer is time delaying definitive treatment.

Why is this even allowed?

It is important to realize that this kind of behavior arises from a free market environment for healthcare. As areas of dense population have more hospitals built, insurance companies are no longer forced to accommodate pricing from local hospitals. They can bargain with other area hospitals. This leads to preferred locations for treatment (in-network) which in turn leads to patients being transferred to those areas OR paying the difference out of pocket. The only people left suffering are the patients who are being moved around unnecessarily, and the providers being forced to spend more time facilitating transfers and less time with patients.